Almost immediately after actor James Gandolfini (“The Sopranos”) passed away back in June of 2013, many critics claimed he had made serious estate planning errors.
Since he did not use a Pour-Over Will (and trust accounts) to distribute all of his alleged $70 million estate, some thought that “close to 80 percent of the assets . . . [might] be subject to state and federal taxes that [could] reach a rate of 55 percent.”
Initially, Mr. Gandolfini’s lawyer, Roger S. Haber, didn’t respond to specific questions concerning his client’s estate. However, about a month after the actor’s death, Mr. Haber agreed to make a few general statements. He told a New York Times reporter that Mr. Gandolfini went to great lengths to provide estate gifts to a wide range of different people – and that he accomplished that in various ways, fully cognizant of all possible tax repercussions.
What, If Anything, Was So Different About Mr. Gandolfini’s Estate?
Apparently, many people assumed Mr. Gandolfini should have left his entire estate to his second wife. After all, anything left to her “would not be subject to estate tax because of the marital deduction.” However, like many other people, Mr. Gandolfini had children by more than one wife – and other special concerns.
When he signed his last will, his daughter by second wife Deborah Lin was only two months old. He probably updated his will then (December 2012) solely for her benefit.
In addition, Mr. Gandolfini wanted to fully provide for his son by his first wife — and to be generous with his siblings and some friends. Although all of these people could have been named in one or more trust accounts, a different choice was made. According to the probate petition filed on July 2, 2013, Mr. Gandolfini’s will only governed somewhere between $1 million and $10 million of his estate. Since he apparently had far more money than that and owned expensive real estate in both America and Italy, he clearly wasn’t seeking to pass everything “just” through his will.
Further proof of Mr. Gandolfini’s careful planning was revealed in his business manager’s filed affidavit. Valerie A. Baugh stated that, “In 2002, Mr. Gandolfini bought a $7 million life insurance policy for his son and put it into an insurance trust which is not subject to estate taxes.” That move clearly indicates that he may have created a number of other special trusts to handle the remainder of his wealth.
Perhaps one of the few unique aspects of Mr. Gandolfini’s estate was that he didn’t take the common celebrity approach. Fox example, former Beatle John Lennon “put all of his property into a trust that he had set up while alive . . . a model of how to keep private affairs private for any prominent person.”
Although Mr. Gandolfini’s lawyer says his client’s will “functioned like a pour-over will given his other assets,” other parties consulted by New York Times reporter Paul Sullivan said “that the will itself was flawed even for someone who was not a famous actor.”
What Flaws May Have Actually Been Present?
- Percentages were used to “divide up the assets for his two sisters, his wife, and baby daughter in his will – after leaving bequests to some friends and relatives totaling $1.6 million as fixed amounts;”
- Complex tax calculations were required. This is based upon the fact that Mr. Gandolfini included his wife and her tax-free share in the percentages referenced above;
- No trust account was set up for his young daughter. Instead, his lawyer “used a standard holdup provision to keep her from getting her share until she [turns 21]”
- No funds were set aside for the upkeep on Mr. Gandolfini’s home in Italy. His stated desire for his children to one day inherit the property was therefore flawed since it can be very expensive to maintain a home abroad;
- The attempt made to bequest the Italian home to different family members may be at odds with Italian law. One expert stated in the New York Times article that “when his clients own property abroad, he always consults a lawyer in that [foreign] country and may suggest that a second will be drafted for those assets.”
Conclusions
Although some errors may have been made, Mr. Gandolfini’s lawyer still stands behind the choices made by his client.
Perhaps this estate plan simply teaches us that you should: (1) provide for your spouse in a separate manner from all others; (2) make sure when you’re making a gift of any expensive real property that you set aside substantial funds for long-term maintenance of it; (4) carefully consult with a lawyer in a foreign country when property is owned there before including it in your will, and (5) provide for all of your young children in as similar a manner as possible.
MN Probate Lawyers and Attorneys
Joseph M. Flanders is an experienced attorney. He routinely handles Minnesota estates administration and serves as a Dakota County Minnesota probate attorney. For further information or advice on your particular Minnesota probate case, contact the law firm at 612-424-0398.
